Value Creation Blog

I was recently at a conference where the presenter was talking about the length it takes for a financial plan to be delivered to a client. He said that among the best firms he found that the average financial plan takes 35 days to be completed.

One of the things we concentrate on is how we can take time out of the consulting and planning process. We have a different way of looking at planning and as a result have been able to take 33 days out of the process. This means we do a financial plan in about 3 hours with two hours involving the customer. We’ve learned how to produce and deliver a financial plan in three days, not 35 days.

Most planners like to work behind a curtain. A typical financial plan is done with a client bringing in information, and the planner going back to work by themselves and entering that information. There will be a meeting where the planner presents their thoughts. The Client will then give the planner feedback with changes that need to be made. The planner then makes the changes and schedules another meeting with the client. This continues until either the client gets tired of going back and forth or the planner gets the thoughts of the client and presents a plan that makes sense.

I believe this is a silly way of doing a plan. I believe the client is an expert at what they want and should be treated as such in the planning process. This means we don’t present a plan to a client, we expect the client to help us build the plan. We do this in our conference room or using Go To Meeting where the client can see what we’re doing as we do it.

When we include the client in the process of building a plan we find we can move much more quickly. The client is the expert at what they want. When you are involved and engaged we can build multiple scenarios to see whether they are on track or not on track in a couple of hours, not 35 days.

The key is to show direction and not have an absolute answer. Financial Planners know that as soon as a financial plan is done it’s likely incorrect. This is because a small difference in any assumption we make will have a dramatic difference in what the plan shows. This is the reason we focus on two things; whether a plan is directionally going the right way and what would happen under several different scenarios.

I believe that using a large amount of detail gives a client a false expectation of accuracy in a plan. Instead we like to use generalized information that help the client understand that we’re planning to see if we’re going in the right direction. We know that directional planning helps us know whether you are moving towards your goals. Like all moving targets you should review your plan ever few years to make sure you’re still moving in a positive direction.

Who would have known that 1987 was going to happen, the tech meltdown of 2000, or the financial meltdown of 2008? Personal things could also happen such as losing a job, getting a raise, or having an extra child. Each of these would cause as dramatic a change as having our investments stressed through outside influences.

Using scenario planning helps with the second part of our plan. We get to help you understand that there are significant things that could happen and significant changes that can happen by changing a few assumptions along the way. Helping you build several scenarios takes only a few minutes and provides tons of value.

Because we use client-facing tools where we build a plan with the client in the room we are able to complete a plan very quickly and help you understand options you might have. We find the quicker is always better than slower and that clients like the idea of having an answer when they walk out of our first planning meeting.

For our business owner clients we’ve created an even easier tool to use than our normal financial plan. You can use this tool yourself to find out if you’re moving your financial life in the right direction. In our special report on the 4 Boxes of Financial Independence you can learn about the different parts of your financial life that will mean success or failure in being able to retire. To get this report, click on the button below.

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: The Patrick Group (DBA Sage 2 Planning Parnters) is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.